I am a CPA in Texas with an MBA from the University of Chicago. I have seen a lot and made many mistakes. Hopefully by now I will have learned something from them. Just as importantly, you may learn something from my mistakes. You can e-mail me by clicking on my "View my complete profile".

Sunday, March 29, 2009

With a Little Help From My Friends-3

"An eternal Washington truth is that the more a federal agency gets beat up for regulatory failures, the more of the world it attempts to regulate. Witness the [SEC], which has responded to recent criticism with a dubious power grab over another industry. This particular overreach is aimed at fixed indexed annuities, a niche in the wider annuity market. ... Whatever their merits, these annuities have always been treated as insurance products, subject to myriad state rules that govern their marketing and sale, and the capital requirements of insurers. While the 1933 securities act gave the SEC the power to regulate securities, it exempted annuities. ... In the age of Bernie Madoff, the SEC is thus putting itself on high alert to protect people whose only risk is making more money than they expect. ... The suits note that a federal court has specifically ruled that these products are annuities, not securities. ... This kind of regulatory wanderlust is all too typical of the modern SEC, which was once known as a cautious regulator but now looks for ever more financial land to grab", Editorial at the WSJ, 7 March 2009.

"As Chairman of the National Association of Independent Life Insurance Agencies, I share the views expressed in 'The SEC's Annuity Grab' ... [7 March] on the SEC's misguided power grab into the fixed annuity market. By seeking jurisdiction over indexed annuities, the SEC argues that if an annuitant is more likely than not to receive payments in excess of that guaranteed in an FIA, then the majority of the investment risk is borne by the annuitant. ... The FIA is clearly not a security. The SEC's line of thinking flies in the face of judicial precedents on what constitutes an annuity exempt from the securities laws", Gary Dworkin letter to the WSJ, 12 March 2009.

The Dinallo saga has a great chance of exposing Wall Street nonsense... ED has blabbed on for a long time about his interactions with the big dealers... get a few of the NYT hounds on the story and a rich trove of nonsense will spill out... he is the ultimate Wall Street tool... he has a big mouth and likes to pontificate...